MCK Q2 Earnings Beat, Sales Miss, '26 EPS View Up, Stock Down

McKesson Corporation MCK reported second-quarter fiscal 2026 adjusted earnings per share (EPS) of $9.86, which beat the Zacks Consensus Estimate of $8.92 by 10.5%. The bottom line improved 39.5% on a year-over-year basis. The EPS growth was driven by strong operational growth across the business, including contributions from acquisitions coupled with a lower tax rate. The company also recorded gains in the Oncology & Multispecialty segment from the sale of an investment. Our model estimate for adjusted EPS was $8.57.

GAAP EPS was $8.92 compared with $1.87 in the year-ago quarter. The prior-year quarter included a charge of $643 million for the fair value remeasurement of assets and liabilities and a charge of $227 million related to business rationalization initiatives.

Revenue Details

Revenues of $103.15 billion missed the Zacks Consensus Estimate by 1.4%. However, the top line surged 10.1% year over year, primarily driven by increased prescription volumes from retail national account customers and growth in the distribution of oncology and specialty products, including contributions from Oncology & Multispecialty segment. Our model estimate for total revenues was pinned at $103.33 billion.

Higher contributions from the Prescription Technology Solutions segment also aided the top line.

Shares of MCK were down 0.2% during after-hours trading on Nov. 5. The company’s shares have gained 48.1% year to date compared with the industry’s 9.2% increase. The S&P 500 Index has increased 16.7% in the same time frame.

Q2 Segmental Analysis

The company started reporting under new reportable segments and organizational structure, effective from the second quarter of fiscal 2026. The current reporting segments are North American Pharmaceutical Segment, Oncology & Multispecialty Segment, Prescription Technology Solutions Segment and Medical-Surgical Solutions Segment.

Revenues from the North American Pharmaceutical segment totaled $86.48 billion, up 8.1% year over year. Per management, the upside was primarily driven by increased prescription volumes, including higher volumes from retail national account customers and specialty products.

The U.S. Pharmaceutical and Specialty Solutions segment reported an adjusted operating profit of $851 million, up 12.9% from the prior-year quarter’s level. This was due to growth in the distribution of specialty products to health systems, and additional contributions from new product launches.

Revenues from the Oncology & Multispecialty segment amounted to $12.04 billion, up 31.5% year over year. This improvement was led by increased provider and specialty distribution growth and contributions from acquisitions.

Adjusted operating profit at the segment totaled $397 million, up 71.1% from the year-ago reported figure. The significant growth was due to higher sales and net gains from the sale of an investment and market decisions within The US Oncology Network.

Revenues from the Prescription Technology Solutions segment totaled $1.38 billion, up 8.8% year over year. This uptick was due to increased prescription volumes in the third-party logistics and technology services businesses.

The segment reported an adjusted operating profit of $261 million, up 19.7% year over year, driven by higher demand for access solutions.

Revenues from the Medical-Surgical Solutions segment totaled $2.95 billion, flat year over year. Sales were driven by higher volumes of specialty pharmaceuticals, completely offset by lower contributions from illness season products and testing.

The Medical-Surgical segment reported an adjusted operating profit of $249 million, up 2.5% year over year. This was driven by operational efficiencies from the cost optimization initiatives.

Margins

Adjusted gross profit in the reported quarter was $3.53 billion, up 8.9% on a year-over-year basis. The figure represented 3.4% of net revenues, down nearly 4 basis points (bps) year over year. Our model estimates for adjusted gross profit and adjusted gross margin were pinned at $3.53 billion and 3.4%, respectively.

The company reported an adjusted operating income of $1.57 billion, up 24.9% from the year-ago quarter’s figure. Operating margin was 1.5%, expanding nearly 18 bps year over year. Our model estimates for adjusted operating profit and adjusted operating margin were pegged at $1.43 billion and 1.4%, respectively.

Financial Update

Cash and cash equivalents totaled $4 billion compared with $2.42 billion during the first quarter of fiscal 2026.

Cumulative net cash provided by operating activities amounted to $1.5 billion compared with $720 million in the year-earlier period.

Fiscal 2026 Guidance

McKesson raised its EPS guidance to $38.35-$38.85 from $38.05-$38.55 for fiscal 2026. The company expects total revenues to grow 11-15% in the fiscal year.

McKesson Corporation Price, Consensus and EPS Surprise

McKesson Corporation price-consensus-eps-surprise-chart | McKesson Corporation Quote

Summing Up

McKesson exited the second quarter of fiscal 2026 on a mixed note, with earnings beating estimates but revenues missing the same.The company’s quarterly performance remained broad-based, with contributions from all major segments. Specialty distribution was again a standout, supported by strong volumes, continued market share gains in community oncology, and steady expansion of the U.S. Oncology Network.

The company deepened its leadership in high-complexity therapies with new capabilities, including a dedicated cold-chain facility and the launch of InspiroCare to simplify patient support for cell and gene therapies. Growth across Prescription Technology Solutions highlighted rising demand for automated access and affordability tools, particularly prior authorization services tied to GLP-1 therapies.

McKesson continued to modernize core distribution through automation and DSCSA-compliant traceability, underscoring the scale and sophistication that differentiate its platform. Cost discipline and operating leverage remained evident, driven by years of investment in digital tools and workflow automation. The portfolio transformation also advanced, with progress toward separating the Medical-Surgical Solutions business and sustained momentum from recent acquisitions in oncology and eye care. MCK expects to complete the spin-off of Medical-Surgical Solutions business by the second half of calendar 2027.

Management again raised full-year guidance, reflecting confidence in the durability of demand, the strength of specialty and technology platforms, and the value of a more streamlined portfolio.

MCK Zacks Rank and Other Stocks to Consider

McKesson currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader medical space are Solventum Corporation SOLV, Boston Scientific Corporation BSX and Alcon ALC.

Solventum, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 4.1%. SOLV’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 13.91%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Solventum’s shares have gained 3.8% compared with the industry’s 2.6% growth so far this year.

Boston Scientific, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 16.4%. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.36%.

Boston Scientific’s shares have gained 10.9% compared with the industry’s 0.6% growth so far this year.

Alcon, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.3%. ALC’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 4.61%.

Alcon’s shares have declined 12.6% compared to a flat industry so far this year.

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